FINANCIAL POTENTIAL OF CO-INVESTMENT INSTITUTIONS AS A TOOL FOR OVERCOMING BUDGETARY LIMITATIONS IN MARTIAL STATE CONDITIONS

Abstract

This article investigates the financial potential of collective investment institutions (CIIs) as an innovative tool for overcoming systemic budget constraints under martial law in Ukraine. It emphasizes the urgent need to transform the national investment model, driven by a critical shortage of budgetary resources and the dominance of defense spending within public finances. The study demonstrates that traditional public funding mechanisms are losing effectiveness in the current context and therefore require supplementation through alternative capital accumulation tools – primarily via CIIs. The research analyzes the current state of CII development in Ukraine, particularly asset dynamics from 2021 to 2024, portfolio structure shifts, and the strategic reorientation of investments toward high-growth sectors such as agribusiness, logistics, housing, and information technology. The ability of CIIs to demonstrate adaptability in crisis conditions – ensuring rapid resource reallocation and supporting financial resilience – is highlighted. Systemic, structural-functional, and comparative approaches are applied to assess the role of CIIs in forming long-term investment resources. A SWOT analysis of CII performance during wartime reveals several strengths (flexibility, professional expertise, support from international institutions), weaknesses (low capitalization, regulatory uncertainty, limited investor trust), external opportunities (participation in reconstruction, access to global investment platforms), and threats (market volatility, competition from global funds). The paper substantiates the rationale for creating a mixed-capital Recovery Investment Fund – «Code of Development» – which would consolidate resources from the state, international financial institutions, and private business within a framework of public-private partnership, strategic planning, transparency, and inclusivity. The fund would target critical post-war transformation sectors: housing, infrastructure, manufacturing, digital technologies, and green energy. International co-investment practices under crisis conditions (Israel, Singapore, South Korea, USA) are examined as relevant experience for adaptation in Ukraine. The study concludes that the development of CIIs should become a strategic element of Ukraine’s renewed financial architecture, capable of reducing fiscal pressure, stimulating investment activity, and fostering a more resilient, agile, and competitive post-war economy.